Union Of India (Uoi) vs A.P. State Cooperative Marketing ...
2004 Latest Caselaw 333 Del

JUDGMENT

Mukundakam Sharma, J:

1.By this order I propose to dispose of I.A. Nos. 3276/1998 and 3277/1998 in CS (OS) No. 984-A/1997 and Execution Petition No. 227/2000.

2.Disputes having arisen between the parties, Shri Ram Bahadur, Additional Legal Adviser, was appointed as the arbitrator to adjudicate upon the disputes which also included a demand for risk purchase loss due to breach of contract by the judgment debtor-A.P. State Cooperative Marketing Federation Ltd. The arbitrator was appointed by order dated December 31, 1996 whereas the award was passed by him on March 26, 1997. The arbitration records which are placed before me indicate that notice of making the award was sent by the arbitrator to both the parties on March 26, 1997 itself sending the same through registered post. A signed copy of the aforesaid award was received by the Union of India from the arbitrator on March 27, 1997 which is disclosed from the application which is filed by the Union of India under section 14 of the Arbitration Act, 1940. Therefore, the A.P. State Cooperative Marketing Federation Ltd must have also received the said signed award from the arbitrator somewhere near the same time and at least within the first week of April 1997. After receipt of the aforesaid award, a petition was filed in this Court by the Union of India under section 14 of the Arbitration Act praying for an order to the arbitrator to file the award in the court. Notice was issued on the said petition by this court upon which the parties entered appearance. On March 10, 1998 both the parties were present in this court when the matter was taken up. On perusal of the record this court found that notice of filing of the award issued by the court had been served on the respondent on November 11, 1997, whereas it was also served on the petitioner. As none of the said parties had filed any objection within the statutory period, the award was made a rule of the court.

3.Thereafter, the A.P. State Coop. Marketing Federation Ltd. filed an application registered as I.A. No. 3277/1998 under Order IX Rule 13 of the C.P.C. praying for setting aside the award on the ground that the respondent had filed objections before this Court and, therefore, the impugned order is required to be set aside. In the said application it was stated that objection application filed by A.P. State Coop. Marketing Federation Ltd. in the registry of this court on December 11, 1997 was subsequently tagged with the file. In view of the fact that the objections were filed by A.P. State Coop. Marketing Federation Ltd. it was prayed in that application that the order dated March 10, 1998 was required to be set aside and quashed. The said application was, however, dismissed by order dated April 20, 1998 as none appeared whereupon fresh applications registered as I.A. Nos. 4061/1999, 4062/1999 and 4063/1999 were filed. The first application was filed under section 151 C.P.C. whereas the second application was filed under section 5 of the Limitation Act and the third application was filed with the intention of obtaining stay of operation of the order dated March 10, 1998. On the basis of the said applications, the order dated March 10, 1998 was set aside and the application registered as I.A. No. 3277/1998 filed under Order IX Rule 13 C.P.C. was restored to file. With the consent of the counsel appearing for the parties I took up the said application for hearing at the time when the Execution Petition filed by the Union of India was also taken up for my consideration. At this stage, it is required to be mentioned that as a decree was passed making the award a rule of the court, the Union of India filed a petition in this Court seeking for execution of the decree passed by this Court on March 10, 1998. The said petition is also listed before me for hearing and by this order I propose to dispose of not only the aforesaid application under Order IX Rule 13 of the Code of Civil Procedure but also the Execution Petition No. 227/2000.

4.After hearing the counsel appearing for the parties and going through the records it is disclosed that an objection was filed by A.P. State Coop. Marketing Federation Ltd. The said application is shown and registered as I.A. No. 3276/1998. The said objection was sought to be filed under sections 30 and 33 of the Arbitration Act as against the prayer for making the award a rule of the court. It is contended in the said objection that the objectors have received from the court on November 11, 1997 the notice of the filing the award dated March 1997 passed by the sole arbitrator and, therefore, the objector was filing the aforesaid objection within the prescribed statutory period of limitation. It must be mentioned herein that at some stage the words under section 30 and 33 of the Arbitration Act were scored out and in its place the words section 34 have been written without mentioning clearly as to which Arbitration Act. The way the application is also framed it is apparent that the same was made to be an objection as envisaged under sections 30 and 33 of the Arbitration Act. However, at some stage the said provisions are scored out from the application and in its place section 34 is mentioned. Therefore, I would treat this application as one under section 34 of the Arbitration and Conciliation Act. Since the aforesaid objection was filed in this Court on December 11, 1997 it was inappropriate to hold by order dated March 10, 1998 that the A.P. State Coop. Marketing Federation Ltd. did not submit any objection to the award. The aforesaid observations of this Court appears to be incorrect and wrong on the face of the record and, therefore, the said order dated March 10, 1998 passed by this Court is required to be set aside and quashed which I hereby do.

5.I have also heard the learned counsel appearing for the parties on the objections which are filed by A.P. State Coop. Marketing Federation Ltd. treating the same to be objection under section 34 of the Arbitration Act as ex facie it is established in the light of the law laid down by Thyssen Stahlunion GMBH v. Steel Authority of India Ltd., AIR 1999 S.C. 2923, that in the facts and circumstances of the present case the provisions of the new Act would be applicable.

6. Section 34 of the Act provides that a party to the agreement may seek for setting aside of the award in accordance with the provisions of section 34 of the said Act. Limitation for filing such an application is also provided for under sub-section (3) of said section 34 which states that an application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal. A proviso is also added thereto which deals with the power to condone the delay by the court when it provides that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. The aforesaid provisions of section 34(3) came to be interpreted in the decision of the Supreme Court in Union of India v. Popular Construction Co., . In the said decision, the Supreme Court held that the Arbitration and Reconciliation Act being a `special law' and the provisions of section 34 providing for a period of limitation different from that prescribed under the Limitation Act, the said provisions would govern the period of limitation and not any provision of the Limitation Act. It was held that the language of section 34 of the 1996 Act using the crucial words "but not thereafter" would mean an express exclusion within the meaning of section 29(2) of the Limitation Act and would, therefore, bar the application of section 5 of that Act. It was further held that by virtue of section 34(1) of the Act recourse to a court against an arbitral award cannot be made beyond the period prescribed in sub-section (3). The law laid down by the said decision is binding and, therefore, the facts of the present case are to be scrutinised in the backdrop of the aforesaid legal position. Admittedly, in the present case the present petition under section 34 of Act is filed in this Court beyond the period stipulated both under the substantive provision of sub-section (3) of section 34, and also beyond the period as provided for under the proviso to the aforesaid sub-section. Therefore, in the light of the aforesaid law laid down by the Supreme Court in Popular Construction Co. (supra) it is held that the petition under section 34 filed by the petitioner is not only barred by limitation but the same is also beyond the period prescribed under the proviso and, therefore, the said petition filed is not an application which is filed for setting aside the said award in accordance with sub-sections (2) and (3) of the Act. Therefore, such a petition cannot be entertained in view of the ratio laid down by the Supreme Court in Popular Construction Co. (supra).

7.The reason for coming to the aforesaid conclusions is set out hereafter. The objection under section 34 is to be filed in accordance with the requirements of law laid down under sub-section (3) of section 34. A copy of the signed award by the arbitrator must have been received by the A.P. State Coop. Marketing Federation Ltd. somewhere in the later part of March or first week of April 1997. The period of limitation as provided for filing a petition under section 34 is three months from the date on which the party making the application had received the arbitral award. However, the delay in filing an application of the aforesaid nature under section 34 could be condoned even after expiry of the period of three months provided the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months by extending the period of limitation by another period of thirty days but not thereafter. In the present case, no application for the condensation of delay as envisaged under proviso to sub-section (3) of section 34 of the Arbitration and Conciliation Act was filed by the petitioner. Even assuming that the copy of the arbitral award was received by A.P. State Coop. Marketing Federation Ltd. some time in the first week of April 1997, still three months would have expired some time in July 1997 and even if the period of thirty days as envisaged under the proviso is extended even then the objection, if any, should have been filed by August 1997. However, the present objection came to be filed some time in December 1997 and the said objection is filed under section 34 without any application for condensation of delay and, therefore, I hold that the aforesaid objection under section 34 being I.A. No. 3276/1998 is not maintainable and the same accordingly stands dismissed being barred by limitation.

8.The award is passed by the Arbitrator and the period for filing the objection has also expired. The objection which was sought to be made out under section 34 is dismissed as barred by limitation, and the period for setting aside the award having expired, the award has become final and binding on the parties. Therefore, the said award could be enforced and executed in terms of the provisions of section 36 of the Arbitration and Conciliation Act, 1996. Under the said provisions, the award passed by an arbitrator which has become final and binding could be enforced under the Code of Civil Procedure in the same manner as if it were a decree of the court. It is stated by the decree-holder that the present decree is required to be transferred to the competent court at Hyderabad. Accordingly, I order the award/decree passed in this case is transferred by exercising the powers under Rule 5 of Order 21 of the Code of Civil Procedure and is directed to be sent for execution to the competent court at Hyderabad. While sending the decree to the competent court at Hyderabad the procedure as provided for under Order XXI Rule 6 of the Code of Civil Procedure shall be complied with by the Registry.

Mukundakam Sharma, J.